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Jan 4, 2018, 09:00am

How Amazon Is Investing In Customer Experience By Reimagining Retail Delivery

When examining the typical customer journey, it’s not difficult to see why delivery is ripe for improvement. In many cases, it isn't something online retail giants like Amazon are able to control -- at least not right now. Bad weather or an influx in volume around the holidays can delay packages from arriving on time. And what about the complications associated with delivering to shared residences and apartment complexes, like gated access, theft and closed leasing offices?

From my perspective, Amazon is looking at a key factor -- fulfillment -- that likely has a huge impact on customer satisfaction and is attempting to gain greater control of those parts of the customer journey. Here are all the ways Amazon is investing in improving the experience in the form of retail delivery innovation. It’s no wonder that Amazon ranked number one in overall customer experience according to ForeSee's newRetail CX Rankings.

Replacing The Mailbox

Amazon isn’t ditching USPS, but it is trying to gain more control over this aspect of the customer experience by essentially replacing mailboxes with locker units, which were initially provided on commercial properties. The Wall Street Journal reported that Amazon has signed contracts with building owners and managers representing over 850,000 apartments in the U.S. to install Amazon lockers. The value for Amazon is being able to know with greater certainty that the delivery experience works as intended, as the lockers allow for a more flexible delivery window and presumably fewer stolen or damaged parcels.

Home Delivery (Inside Your Home)

Another big innovation Amazon is working on is allowing drivers to deliver packages safely inside a customer’s home -- or a secured area on the property such as a shed, garage or even a car. Initially, this seemed like a huge stretch -- the thought of a stranger entering your home/car to make sure your package arrives requires a lot of trust. That’s something Amazon has much of in the form of loyal customers. If successful, it would increase the odds that packages arrive undamaged and on time.

Amazon’s Delivery Fleet

The many factors that could cause complications during the delivery process are the responsibility of important partners like UPS, FedEx and USPS. While it’s unlikely that Amazon would (or could) dissolve these partnerships, it does see value in controlling this part of the fulfillment element more closely and has tested its own shipping and delivery service. In doing so, it wouldn’t be as affected by issues related to general parcel delivery (weather delays, lost packages, lack of tracking shipments). If it operated its own delivery service that only handled packages ordered by Amazon customers, at least strategically it would help to alleviate complications.

Product Returns

Amazon is largely an online retailer (although that is quickly changing), and thus it cannot offer what many other retailers do when it comes to returning items. For instance, Best Buy and Target allow customers to make returns to physical store locations even if they were purchased online. That makes returns to Amazon more of a hassle because it may involve repackaging, return shipping barcodes from the seller and taking it to a parcel delivery service location. However, the company recently kicked off an exciting new partnership with leading apparel retail chain Kohl's to accept returns of Amazon orders at 82 of its Chicago and Los Angeles locations. While this may seem like a mundane change to the customer experience from an innovation standpoint (compared to, say, delivery drones), it could serve as an equalizer for customers that want the ease and familiarity of returning items at a store.

While not a recent addition unless you live in the U.K., Amazon offers customers the option of getting a tiny branded device with a single button that can replace specific goods when pressed. Out of laundry detergent? Just hit the Tide button under your sink. Items with dash buttons are not particularly exciting purchases, and most consumers probably don’t give those purchases much thought -- thus loyalty to a regular retailer can waver depending on convenience or more attractive prices or sales. Amazon is aware of this aspect of the customer journey and aims to give its customers a quick, convenient path to purchase these sorts of items. This is one big innovation from Amazon that has received quite a bit of flak, viewed by some as providing a fix to a non-existent problem. But these dash buttons are hacking the customer journey by giving customers the option of restocking these purchases before visiting grocery stores or seeing ads for a sale.

Amazon’s Innovative Delivery Strategy

Most of the attention Amazon gets comes from expanding into new areas, providing cheap tablets and building smart speakers you can talk to to control your home. But all of these pale in comparison to the work it is doing to gain greater -- and more measurable -- control over its fulfillment of purchases to customers via shipping, delivery and returns.

Amazon is hyper-focused on providing a great customer experience, and as part of that it understands the need to both map the customer journey and innovate in ways that eliminate issues before they arise. In doing so, Amazon is able to continue raising the satisfaction of those who choose to shop with it -- and ultimately reinforce its ability to maintain a strong, valuable retail brand that forces all competitors big and small to pay attention.